Saturday, April 30, 2011

Many of our children are overweight, and there are a plenty of studies, panels, and new rules and regulations to combat the problem. A half a century ago, when I was growing up, almost no kid was fat. There were plenty of skinny kids, like me. Why?

I grew up in Melrose, Mass in the 1950's and early '60s. At that time, Melrose was an affluent suburb north of Boston with a reputation for having an outstanding school system.

In elementary school, there were no school buses. Almost everyone walked. There were a few rich kids whose parents drove them to school, but the rest of the families only had one car, which was usually used by Dad to take to work. When I started kindergarten, I walked five blocks to school, and by the time I went to Junior High I walked over a mile to school; and in high school I walked just under two miles. If we had lived a half a block farther away from high school, I would have been able to ride a school bus for free, because the rule was you could ride the bus if you were over two miles from high school. I very occasionally got the school bus when I was late, but I had to pay. That was not the worst of it: the bus was usually so crowded, we had to stand, and many kids were smoking, so the air was blue with smoke!

I was not athletic at all; I was usually the last to be picked for any playground game--but walking was exercise, although we did not know it at the time. In elementary school, there was no cafeteria, and we all went home for lunch. That meant that every day I walked 20 blocks just to get to school and back

We had snack in the morning, which was always white milk, and a cookie or cracker. No one was allowed to bring any food into school, and there were no vending machines in school, so milk and a cookie were it during the day. We only got one cookie; there was just enough for everyone.
In Junior High, we ate lunch at school, but everyone had to bring lunch, because there was no cafeteria serving food. I think white milk was offered. Again, no food other than a lunch bag was allowed in school, and there were no vending machines.

We kids almost always stopped at the store when we went home after school to buy penny candy. We all had a lot of cavities; maybe eating that penny candy was why. In junior high and high school, we would stop at the local ice cream store for cones or vanilla cokes after school

In high school, there was a cafeteria where you could buy your lunch. Most kids didn't buy lunch; we usually brought our lunch to school. The cafeteria only had white milk for a beverage. There were no vending machines, and food was only allowed to be consumed in the cafeteria.

So, the obesity problem was solved a half century ago with simple rules that did not cost taxpayers anything. Kids walked to school unless they lived more than two miles from the schoolhouse. Vending machines were not allowed; only milk was served as a beverage, and food was only consumed in the cafeteria.

To be sure, having children walk to school today is bigger problem because of higher traffic, faster speeds, and sidewalks in disrepair. And parents today fear for their children's safety, so they drive them to school. But walking could become again routine for children, as the problems that keep children from walking to school are easily solved at minimal cost. More crossing guards at appropriate places, and more traffic lights or signs could be posted. Fixing sidewalks would benefit not only children, but all walkers. And parents' fears can be alleviated with some facts: The statistics show that our towns and cities are as safe as they were when I was growing up. In addition, children are already educated about safety when walking to school, so the risk to children is minimal--and certainly much less than the health risks associated with obesity.

At the same time, the Commonwealth of Massachusetts has been in the news for funding "Maria Talks" , a website featuring a perky 18 year old girl who talks breezily and graphically about teenage sex. To Maria, teenage sex in all its forms is an ordinary, expected, pleasurable activity teenagers can choose with little guilt or risk.

So, this is the story: capture the flag poses a substantial risk of injury to kids but sexual activity among teenagers is not only condoned, but celebrated. Teenage sex poses dangers of terrible infections and diseases, the danger of unwanted pregnancy, family collapse, and the real danger of serious emotional injury. And for what? At least children's games like kickball promote socialization, exercise and other healthy benefits. Teenagers engage in sexual activity mostly for unhealthy reasons: wanting to be popular, giving into peer pressure, wanting to keep a boyfriend or girlfriend. In fact, if whiffle ball poses a serious risk of injury and must require state sanctioned adult supervision, then under that criterion, teenage sex should be banned.

Our society bans all kinds of activities deemed risky to teenagers: drinking, drugs, cigarette smoking to name a few. Other activities are outlawed for all of us, including teenagers: speeding, riding bikes without a helmet, riding in a car without seatbelts. Indeed, all of those risky activities are sanctioned with fines and even criminal penalties. To be sure, bans against risky activities do not eliminate them altogether, but they do decrease their incidence, and our society believes that enforcing bans on such activities is worth the effort. Society believes that teenagers can abstain from many dangerous activies, yet bureaucrats pretend that it is impossible, even risky, to encourage sexual abstinence among teenagers. Indeed, Maria and her compatriots at Departments of Health across the nation condone and even encourage sexual behavior outside of marriage. The result has been a startling increase in unwed pregnancies, from 7% in 1960's to 40% now. In black households, the rate is 72%

So, in our risk averse society, we protect our children from dangers unheard of and certainly un-thought of by our parents and grandparents. Yet, we allow our children--and especially our daughters--to be exposed to the enormous risks of teenage sexual activity with a shrug of the shoulders. It's time to return some judgment in assessing the real risks to our children, not the phony risks of whiffle ball and capture the flag.

Wednesday, April 20, 2011

The corporate tax rate in the U.S. is 35%, the highest among the top 10 developed nations in the world. President Obama has insisted that the 35% rate is misleading because of all the deductions and credits that corporations can employ to reduce the amount of taxes actually paid. A study jointly done by the Tuck School of business at Dartmouth and the Kenan-Flagler Business School at the University of North Carolina compares effective corporate tax rates for all developed nations. The study shows that while the United States' effective corporate tax rate is in fact lower (22.5%) than the 35% nominal rate, it is still 2nd highest among the 10 most developed nations demonstrating that there is a disincentive for U.S. multinational corporations to repatriate profits earned overseas. These profits are being reinvested overseas and are not being reinvested here to help expand our economy and reduce unemployment.

Paul Ryan's proposal to reduce tax rates across the board while eliminating most of the deductions and credits would go a long way toward enhancing U.S. competitivenss in the world markets thereby reinvigorating our own economy. It would also reduce the kind of distortions evidenced by the revelation that GE pays no taxes to the IRS while other corporations are paying close to the 35% nominal rate.

Tuesday, April 19, 2011

The Huffington Post has a front page story today about a "racist" email forwarded by a GOP "activist". So its "racist" and offensive when the President is portrayed as a chimp. Seems times have changed since 2007. The Huffington Post was the host site for a column by a Harvard Phd entitled New Scientific Study Reveals Bush is a Chimp. It would be interesting to see how many Democratic activists forwarded this column or any of the innumerable pictures and websites of Bush as a chimp (just google Bush and chimp and see what you get - 1,410,000 results), but that wasn't news because it was "funny". Bush as chimp is funny, Obama as chimp is offensive. Just more media hypocrisy.

Monday, April 18, 2011

Hedge fund manager John Paulson offered a clear explanation in an interview with the French-language financial newspaper, Les Echos, on April 11.

"To me, the major risk for the U.S. recovery is stagnating housing market. According to the latest figures, house prices are slightly down. Lack of funding limits the scope for private home purchases in the United States. Currently, banks have handcuffs. They can not do anything against borrowers if they default on their loans. The private sector is frozen because of regulatory uncertainty on foreclosures. Banks do not want to grant mortgages because their rights are [not] guaranteed. Today, housing starts are at their lowest level for fifty years! That is why we have a recovery with slow job creation. We are at a lower level than 300,000 new homes a year against a peak of 2 million in 2007 (which had helped create 8 million jobs). Without restarting the housing sector and a minimum of 1 to 1.2 million homes built annually, it's hard to have a real strong recovery. . . . When I made this prediction [last year that property prices would rebound in 2011 by 8% to 10%, that] was before the reform Dodd-Frank 2010 [passed]. Since then, banks have virtually halted lending for home financing because of the lack of clarification on the rules. This will be difficult to have a rebound in property prices this year".

See my earlier post: Dodd-Frank: Regulation Only a Government Could Love

Sunday, April 17, 2011

It's creepy. Scores of buses and large vans travel Northeast Kingdom roads every day from the back roads of Stannard to the streets of St. Johnsbury and Newport--empty, or nearly so. These ghost vehicles are running on taxpayer funds--but taxpayers have no idea how much they are expending for these strange journeys. RCT Vermont, the organization which drives 21 empty vans and buses in the Northeast Kingdom, provides no information about how much its executive director earns, what RCT's payroll is, or how much it costs per passenger to drive these vehicles with phantom passengers around the Northeast Kingdom. We just pay the bill--and we don't know how much we are paying.

We do know the cost of another taxpayer funded mass transit debacle a few years ago. The commuter train between Burlington and Charlotte, Governor Howard Dean's pet project, cost nearly four times its projected capital cost. It also had an annual operating cost of $2.6 million--nearly three times the projected budget. Ridership and ticket sales were approximately 1/3 of the estimate, resulting in an annual operating loss to taxpayers of over $2.5 million per year.

It appears from the ghost vehicles plying their trade in the Northeast Kingdom that another mass transit debacle is in the making.

In December 2008, Sen. Bernie Sanders addressed a transportation summit meeting at UVM in which he advocated government funding of rural mass transit. He said, "One of the areas that we have got to look hard at is public transportation, particularly for rural America where it is virtually non-existent…The federal government must do its part to make sure that transit service is widely available by providing more capital and operating funds to rural providers. Addressing transportation needs also presents an opportunity to curb global warming. The transportation sector today is the source of 25 percent of U.S. greenhouse gas emissions and an even greater share in Vermont."

The results of Sanders' initiatives are the ghost vehicles of the Northeast Kingdom. Sanders secured funding for RCT as solution to a non-existent problem. Public transportation is "virtually non-existent" because virtually no one needs or wants it. And Sanders' other problem--curbing global warming--has been made worse by this debacle. The theory goes if people share rides in a mass transit vehicle, the number of private vehicle trips will go down, thus cutting down on greenhouse gas emissions. Instead, we have no decrease in the number of private vehicles on the road; and large empty passenger vans and buses traveling around all day. Their carbon footprint must be huge.

How do taxpayer-funded farces like this happen? Because our elected representatives' ideas, no matter how cockamamie, are not vetted or tested in the market place. And if a government funded project fails, no one is held accountable. Sen Sanders, Leahy and Rep. Welch have had scores if not hundreds of pictures in the paper at ribbon cuttings and awards ceremonies where government funded projects were celebrated and later the projects quietly died.

We need elected representatives who will do the difficult work of saving taxpayers' money by analyzing the efficacy of government funded projects, instead of doing things the Sanders' way: taking our money to fund his pet projects, and not coincidentally getting favorable free publicity for his next campaign.

Saturday, April 16, 2011

Ed. Note: this letter to the editor by Carol Zuccaro of St. Johnsbury was published in the Caledonian Recordon April 16, 2011. It is an eloquent epistle on the sanctity of all life and end of life choices without physician assisted suicide. A must read for those interested in this essential issue.

"Doctor-prescribed or physician-assisted suicide is NOT death with dignity. True dignity is embracing life -- its sorrows and its joys. And natural death is a part of life.We do not have the right to choose the hour of our death any more than we chose the hour of our conception. There may be a reason for the timing of our death that we mere mortals will never know. My purpose in life might not be accomplished until my last few weeks or hours.Today, with correct doses of medicines or opiates, there is no need for anyone to endure pain, even if, as the text of most Living Wills read, the medication to alleviate suffering might "hasten the moment of death."Dr. Ira Byock, Director of Palliative Care at Dartmouth-Hitchcock, and author of Dying Well: Peace and Possibilities at the End of Life, is one of the nation's leading proponents for changing how we approach death and deliver end-of-life care. He states that people can be "well" even to the very end, and that many hospice patients experience moments of joy.Byock says that no one need suffer pain, regardless of the disease, if opiates are administered properly. He stresses that dying can have "precious value," and that for people who are dying, the best care possible may well be at home or in some other hospice situation. He says people should be "not only kept comfortable, but honored and celebrated through the last part of their lives." Byock states there are things we could do to improve the way people die: repairing relationships, respecting the patient's integrity, helping the dying to live as fully as possible, reducing pain, and allowing time for transcendence and "letting go."

This final stage can be a time of family or personal reconciliation. Very few of us could say, as Thoreau did when asked a few hours before his death, if he had "made his peace with God," "I have never quarreled with Him."When my father was dying, good things happened in our family in his seven months of home hospice care. We were able to visit, listen to his stories, and express feelings. Dad was able to re-live memories in stories and photos and receive phone calls from friends and relatives. My mother had time to accept the fact that the love of her life was dying. Though we miss him greatly, this stage of Dad's life was a positive experience for all of us.Not everyone is fortunate enough to have this kind of support, but for those who don't, Byock says those who work with the dying should try to improve their quality of life. He says, "Our job as physicians is to help people redefine hope" and find meaning... it seems beyond the bounds of medical practice to validate the person's feeling of hopelessness and worthlessness... Where you would expect only misery, often remarkable things happen." (Google Ira Byock or dyingwell.org, for links to his books, Dying Well and The Four Things that Matter Most and to his many articles.)As Cardinal Bernadin of Chicago wrote, just days before he died of pancreatic cancer, "Creating a new right to assisted suicide will endanger society and send a false signal that a less-than-'perfect' life is not worth living."

Friday, April 15, 2011

Ed. Note: here is the second article by George Coppenrath, published in the Caledonian Record on April 14, 2011. Coppenrath is a certified insurance counselor. He proposes a market based solution which will lower health care costs while covering Vermonters. This is well worth reading.

Vermont residents enjoy some of the lowest insurance rates for business, homeowner and automobile insurance in the country. Combined with the fact that every employer must provide workers' compensation insurance for its employees and that all vehicles operated on Vermont highways must have insurance, that is quite amazing.

How is that possible? Vermont has one of the most competitive market-based property and casualty insurance industries in the country especially compared to Massachusetts and New Jersey where the states attempt to control the costs.

The property and casualty insurance climate allows insurance companies from other states to file rates and use them while they are being reviewed and approved. This results in more companies competing in the marketplace. All companies provide discounts for safer work environments, better driving records, vehicles with lower repair costs, and for homes that have been renovated and well maintained. As a result Vermont residents pay less for insurance and maintain equal or better coverages than residents in other states.

What about those who have bad driving records, e.g., DUI or multiple accidents or several employee injuries resulting in much higher auto rates or workers compensation rates? Vermont has two insurance "pools" that are imperceptible to the average resident. They both work a little differently but the concept is the same; if a person or business needs to purchase automobile or workers compensation insurance they can purchase it from a pool mechanism. For example the auto insurance pool consist of individuals who, due to driving records, would not be eligible for a policy in the marketplace. Every company that sells property or casualty insurance in Vermont must participate and issue a policy based on the type of vehicle and driving record, so there is guaranteed insurance coverage.

A similar system can be designed and used for health insurance, i.e., allowing insurance companies ease of entry, establishing a pool concept, requiring companies to issue policies, pricing based on health indicators with discounts for non-smoking, weight control, lower blood pressure, etc. and surcharges for existing conditions, etc. The number of pool policies required to be taken by each company would be based on the size of their Vermont customer base. The cost for some of the policies could be substantial. However, I am confident that our Legislature and executive branch could focus their efforts on the design of a sliding scale premium basis that would provide caps on health care premiums that exceeded a specified percent of their income. The cost of the premium subsidy could be paid for from tax revenues charged to each company for each policy issued.

This proposal would reduce health care premiums within 12 months, provide access to health insurance for anyone who wants to purchase it, and limit the cost for individuals and families who are not eligible for Medicaid and who cannot afford the full premium due to income or health conditions. In addition, the Legislature could, with the assistance of the insurance industry, design health insurance "package plans" similar to Medicare Supplement plans to make the pricing and benefit comparison easier for consumers.

The Green Mountain Health Care legislation currently marching through the Senate committees will force increased taxes on employers and employees, drain resources from hospitals, reduce the quality of services, remove choices from doctors and patients, and entangle Vermonters with the prospect of health care costs consuming more and more of the human services budget, thus reducing resources for services to our most vulnerable populations All legislators who have watched the Medicaid program consume larger and larger portions of the Human Services budget should take particular note that assuming financial responsibility for all health care costs will guarantee less resources for residents who rely on those services on a daily basis. My proposal is a far better solution for Vermont.

The pool concept is similar to existing products with the addition of a sliding scale for low middle income residents. For example the Legislature can design three packages (similar to Medicare Supplements) that would standardize coverages so that consumers can compare coverage/pricing and companies can easily price out each package. A basic plan might have free prevention, 80/20 or 70/30 outpatient with high deductibles and hospitalization; with a second, more comprehensive benefit package with higher premiums, etc. All health insurance companies who register and file could participate in selling to all residents at market based premiums. For persons with existing conditions or otherwise high risk residents the pricing would be higher (similar to VtAIP or NCCI surcharges.) Every health insurance company would be required to take a percentage of the pool based on their writings each year. The Legislature could determine a percentage of income compared to health insurance premium cost (similar to property tax rebate) and provide either a cap for residents or a sliding scale with the state absorbing the additional premiums. This plan would require additional tax revenues (possibly by a tax on health ins premiums?), but the state would not be responsible for the total cost of health care and would focus on standards, quality control, assisting high risk and low income residents.

I am not sure how this would price out, but it would depend on several factors... types of packages, amount of subsidy, etc., but the process would be market driven with optional benefit selections and lower premiums due to competition while allowing everyone to have access to health insurance.

Thursday, April 14, 2011

George Coppenrath, a certified insurance counselor since 1988, has written two excellent articles in the Caledonian Record about the Democrats' takeover of Vermont's health care system. Here is the first, published on April 13, 2011, entitled "Health Care, 'Talking Points' vs. Reality" : It is well worth reading.

"We have seen and heard Vermont Gov. Peter Shumlin and some legislative leaders repeat the same statements over and over. In Montpelier those are called "talking points" and are often used to reinforce the point of view that supports their position. Unfortunately these "talking points" are often untrue and unsubstantiated. For example: "the current health care system is broken and we need to fix it" is not true. We have some very well managed organizations with competent and caring providers doing their best under conflicting, inefficient and expensive mandates from our government since 1991. Legislation was passed at that time mandating requirements for health insurance that were not sustainable. Because of that legislation Vermont residents had few choices outside employer sponsored health insurance.As the mandates took effect and competition among insurance companies disappeared; the cost of premiums marched steadily upward. The talking point: "this failure of the market-based system" is clearly untrue because, after the 1991 legislation took effect, those persons who were previously able to purchase health insurance could no longer afford it. If their incomes were low they applied for Medicaid; if they were not eligible for Medicaid they went without insurance. Over the following 15 years the number of Vermonters on Medicaid marched steadily upward as did the number of residents without insurance. This was a direct result of the action of our state Legislature.Another talking point is: "the cost of health care needs to be controlled." Since recorded history the best mechanism for controlling costs is competition. For example, look at package delivery or competition in the phone industry; we see more competitors, lower costs, more product options. I have yet to see an example of government control reducing costs. And yet many who advocate for more government action to lower health care costs frequently use the term "cost shift." Cost shift occurs because the federal and state health insurance programs pay only 65 to 85 percent of the true costs for health care. The private insurance companies have those costs "shifted" to them resulting in much higher health care premiums paid by private individuals and business groups, e.g. up to 120 to 130 percent of the actual costs. That means 1/4 to 1/3 of your increased premium is due directly to the government's "cost control" management. If you consider that, and the recent proposed tax increases on health care providers it makes one wonder, "how does increasing the cost of health care by adding a 17 percent tax, reduce the cost of health care?"It is clear that the current government-directed health care mandates and regulations have resulted in higher premiums, more uninsured residents, less competition, and fewer options for health care providers and consumers."

Tuesday, April 12, 2011

The Green Mountain Council of the Boy Scouts of America has decided to honor Sen. Bernie Sanders as Citizen of the Year. I attempted to email the Green Mountain Council a copy of The Senator from Antipathy, an article quoting Sen. Sanders' own words from his memoir, "Outsider in the House" . The email from the Scout's website refused to receive it, saying "possible offensive words found in the message text". I then tried to send it from my own email address. Again, it was rejected. The message stated:

"A recent e-mail apparently sent by you contained words or phrases that are inappropriate for the BSA e-mail system on 4/12/2011 3:52:13 PM. Your e-mail was not delivered."

In neither email did I use any offensive words. I only quoted Bernie Sanders..

Bernie Sanders has been named Citizen of the Year by an organization which considers Sanders' own words published in his memoirs to be so offensive and inappropriate that they refuse to accept emails with those words in them. As I said in my email, the Scouts should set their standards higher when naming their Citizen of the Year.

Marie Antoinette allegedly said "Let them eat brioche" when told that bakers had no flour for bread. In fact she never said it, but one name she was given fits President Obama: because of her extravagant spending the French called her Madame Deficit.

The incident Jen reports in her article, Obamantoinette, is disturbing, not only because of Obama's suggestion that we buy a $40,000.00 four passenger car, but also because of his attitude toward the questioner. When the audience member asked about high gasoline prices, Obama ridiculed the questioner, according to the White House transcript:

"I know some of these big guys, they're all still driving their big SUVs. You know, they got their big monster trucks and everything. You're one of them? Well, now, here's my point. If you're complaining about the price of gas and you're only getting eight miles a gallon--(laughter)--you may have a big family, but it's probably not that big. How many you have? Ten kids, you say? Ten kids? (Laughter.) Well, you definitely need a hybrid van then. (Laughter)."

Heh Heh Heh. The plebians cling to their guns, religion and their SUV's. Obama's unscripted moment reveals his royalist sentiments.

Monday, April 11, 2011

Let them drive a Chevy Volt! That was President Obama's response to a citizen concerned about historically high gas prices. He actually told the man that he should think about a trade-in. Of course, the President doesn't need to worry about a buying a new car - the Chevy Volt costs only $40,000. Or the costs of commuting to work at $4.00 per gallon. Or the taxes, registration and insurance. Or trying to fit a family of more than 4 into a fuel efficient car. And maybe he thinks shippers of produce to supermarkets should also trade in their 18-wheelers for Chevy Volts. But he doesn't have to worry about the rising cost of groceries either. "Let them eat cake!"

Sunday, April 10, 2011

Democrat Douglas LaFollette, the Wisconsin Secretary of State, who by the way, has failed to discharge his duty to publish the budget repair bill that was passed several weeks ago--resulting in the law not going into effect, said at a Madison rally yesterday that conservatives "have brainwashed approximately 50 percent of the voters in our state." Mr. La Follette echoes Bernie Sanders' opinion about the voters. In Sanders' book, "Outsider in the House", Sanders said ordinary citizens are "ignorant" and prone to "fear" when they vote for Republicans.

So, that's it. We're too stupid for democracy. If millions are prone to brainwashing, then we need totalitarian leaders who will dispense with pesky elections and rule in our best interest. After all, if we can be so easily brainwashed, we certainly cannot take care of ourselves.

Thursday, April 7, 2011

The other morning VPR's "news" broadcasts provided another example of the garden variety propaganda which passes as news on VPR. The first story reported a "concern" by what VPR called a nuclear "watchdog". The "watchdog" is the New England Coalition against Nuclear Pollution, an organization whose rigid religious beliefs about nuclear power have not changed one iota since its founding forty years ago despite the unparalleled safety and clean air record of nuclear power. New England Coalition's "concern" broadcast by VPR was that there were submerged cables at Vermont Yankee. VPR did not bother to air any response to debunk this harebrained claim. In fact, VPR has broadcast this particular "concern" about submerged cables at least a half a dozen times over the last six months. VPR has regularly broadcast New England Coalition's press releases as news for decades, most of the time without broadcasting any response to the Coalition's claims. And VPR always calls the New England Coalition a "watchdog", rather than the rigidly ideological advocacy group it actually is.

The next story did use the word "ideologue" about--guess who? Republicans. The story was a typical puff piece "interview" with Rep. Peter Welch. As usual, VPR never asked any tough questions, but allowed Welch to pronounce his views without examination. Welch was talking about the budget, and of course, indicated that Republican ideologues were getting in the way of a sensible budget. VPR could have asked Welch why the Democrats did not pass their budget last year, or what is Welch's plan to deal with the 1.5 trillion dollar deficit this year, but VPR, as usual, never asked any questions except those which allowed Welch a platform for his views.

So: this is what passes for news at VPR: a broadcast of a press release by a rigidly ideological advocacy group called a "watchdog" by VPR, and a broadcast of a press event on behalf of Rep. Welch in which Welch disparages his opponents with VPR's tacit approval.

VPR has a perfect right to broadcast propaganda. But it should not call itself a news organization or ask for taxpayer's money to support its ideology.

Tuesday, April 5, 2011

The Dodd-Frank Law was hastily passed by Congress last year with the stated objective of preventing another financial crisis like the one precipitated by the mortgage industry activities which came to a head in late 2007 and 2008.Like many politically-motivated laws, the Dodd-Frank regulations don’t address the root of the problem, but instead add an enormous burden to the business community resulting in some absurd compliance requirements at enormous cost to tax payers and consumers.

It has become clear over the past several years that the primary cause of the housing bubble and inevitable mortgage debacle was the peeling away over the years of sound credit standards.This approach was pushed by Congress to promote home ownership for all.It was implemented by Fannie Mae and Freddie Mac, quasi government agencies created by Congress, and the nation’s largest purchasers of home mortgages originated by mortgage companies and banks. Unfortunately, the Dodd-Frank bill does nothing to address Fannie Mae and Freddie Mac.

Instead, for instance, it requires collection of ever more data from banks and mortgage companies.The Home Mortgage Disclosure Act (HMDA) required collection and reporting of 28 pieces of data for each residential mortgage loan originated by mortgage lenders even before Dodd-Frank.Dodd-Frank has increased reporting requirements by adding another 13 required data points.It is unclear what the government does with all of the data or how it relates to preventing future problems.What is clear is that it is a costly process in both time and money.Those costs are ultimately borne by all of us.

Another requirement mandates that the mortgage loan officer working with the borrower cannot be the person ordering the property appraisal.That task must be accomplished by someone further removed from the transaction. Once the appraisal is received by the financial institution it now, thanks to Dodd-Frank, must be reviewed by someone other than the loan officer and other than the person who ordered it.In the event the person reviewing the appraisal is another lender who may typically have a vote on approval of mortgage loan, he and the lender cannot participate in the vote.Keeping track of all of this is not only another costly administrative challenge, it removes the original lender from accountability for the mortgage he originates, and it adds to the time and cost of making a mortgage loan.

These are relatively minor examples picked from many in the 5,000 pages of regulations stemming from the Dodd-Frank Law.Instead of addressing the problems directly, and reviewing effectiveness and enforcement of existing regulations, Congress is smothering the financial services industry with regulatory overkill. Bernie Sanders, Pat Leahy, and Peter Welch supported this legislation.They should be held accountable to all of us Vermonters who will be paying higher taxes and higher costs to obtain a mortgage.

Sunday, April 3, 2011

It has been over forty years since members of my generation rebelled against what we called The Establishment.Since then, the Establishment has become even more monolithic and powerful than it was in the 1960’s.Nearly every institution today from professional organizations (AMA, ABA, ACLU) to identity groups (NAACP, NOW, League of Women Voters) to private and public sector unions to mainline Christian churches and mainstream media to virtually every institution of higher learning have the same view of power and politics: ordinary people are ignorant and incapable of running their own lives, and government is the solution to all our problems.Power has dramatically aggregated to WashingtonD.C., and institutions that used to be independent have become D.C. power brokers. President Obama’s top ten contributors to his 2008 campaign demonstrate how the proponents of government contol over ordinary Americans have become The Establishment:

Ordinary people are the best judge of what is best for themselves and their families.In my law practice,I have met hundreds of people who are in legal trouble, many through no fault oftheir own.Some have terrible dilemmas they face; others are facing terrible tragedy. I have also met many people working hard to operate their businesses or plan for their families' futures. The vast majority of my clients deal with their problems and challenges with grace, fortitude and wisdom, even if they have few resources. They are not victims, they are grownups dealing with tough issues on their own or with the help of their families. They are the "ordinary" people whose judgment about what is best for themselves and their families is far superior to what the Establishment understands or believes.

The Establishment does not believe in ordinary people.They believe that they know what is best for all of us—and they are out to prove it. Each year they want to take over more power to determine what is best for us and our families. In Vermont we are going to be protected by a Health Care Reform Panel and an Accountable Care Organization. In Washington Bernie Sanders has proposed Early Care and Educations Systems administered by the government for children aged 6 weeks to five years. These are two of the latest examples of the Establishment's power grabs.

We 1960's geezers should lead a new rebellion against the Establishment, and demand that Washington D.C. and Montpelier stop snatching power and money from the people.

Friday, April 1, 2011

This may come as a shock to some politicians, but it is not evil for a corporation to turn a profit. In fact, horror of horrors, the goal of a corporation is to make a profit. What are profits? Profits are what is left over after a company pays its operating costs. Profits are used for many things - few, if any, are evil. They can be used to expand the company (which creates jobs), for research and development, as donations to charities, or they can be handed over to evil stockholders. Whoops. Stockholders are not evil either - you probably are one yourself. Do you have a pension or a 401(k)? Then you are a stockholder and I'm sure you are not evil.

A company that fails to maximize its profits will soon find that they can no longer compete in the global marketplace and may have to layoff workers or go out of business. A company that fails to maximize profits will fail to obtain capital from investors, thus limiting their ability to expand. If a company intentionally or negligently fails to maximize profits, they may even be subject to shareholder suits.

That brings up taxes and costs of hiring. The United States has the highest corporate taxes in the developed world. If taxes and hiring costs are too high in one country and lower in another - companies are going to move operations to the lower cost country in order to maximize their profit. That is not evil, it is a necessity. If they did not, they would not be able to compete.

This phenomenon can even happen within the United States, as well as globally. For instance, in Massachusetts recently Fidelity announced they were moving jobs right across the border to New Hampshire. They are trying to lower their costs so they can effectively compete and maximize their profits.

Countries and states compete for companies to come so that their people will be employed and to expand their tax base. It used to be that America had the resources and the educated population needed by companies so they were willing to pay any extra costs required to operate here. That is not the case anymore. The U.S. is lagging behind in education despite the fact that we are paying more per student than most if other developed nations. Other countries are now able to provide educated employees and resources needed as well as offering lower costs of hiring and taxes.

What can be done?

First of all, the U.S. needs to lower the costs of doing business here. Not only does the U.S. have the highest corporate tax rate, corporate profits can actually be taxed twice! They are taxed at the corporate level and they are taxed again at the stockholder level when the corporation distributes its profits to its stockholders. Government mandates on benefits and payroll taxes have also made hiring new employees prohibitive.

Secondly, we need to start educating our future employees. We need to recognize that throwing more money at the problem is not working. Schools need to be held accountable when they fail to produce educated students. Expectations of student performance need to raised.

Thirdly, we need to reduce the size and scope of government regulations. Companies face a huge amount of costs from trying to comply with an overwhelming amount of regulations - often redundant at the federal, state and local level.

Fourth, the size of government debt needs to be significantly reduced. The government is competing with companies for capital to fund its overwhelming debt. Guess who always wins that competition? Capital that goes to the government cannot be used by companies for job creation.

Finally, politicians can stop bad-mouthing corporate profits for political gain. One would think those in favor of more revenues for the government would want to expand the tax base. Expanding the tax base necessarily involves increased profits. Higher profits mean more revenue from corporations and more revenue from the people those corporations hire. It is in the government's best interest for a company to maximize its profits because government revenue goes up as a result.

So, next time you hear a politician bad-mouth corporate profits, know that they are actually bad-mouthing increased job creation, research and development, charitable contributions, returns on investment for your 401(k) and government revenue.

An informative article in yesterday's Wall Street Journal exposes the real cost of so-called "renewable energy". For instance, the article points out that it costs $210 per megawatt hour for solar power. This compares to only $95 per megawatt hour for coal generated power. Government subsidies in the form of tax credits and mandates on utilities to purchase solar power are the only reasons that solar power can be made economically viable. The problem is that the cost of the subsidies and power purchases (feed-in tariffs) are passed on to consumers who pay higher taxes to fund the subsidies and higher electric rates to cover the costs to utilities for the above market rates they are forced to pay to the producers of solar power. In Vermont utilities pay $0.30 per kilowatt for solar power (and $0.20 per kilowatt for wind power) which compares to only $0.04 per kilowatt for power produced by Vermont Yankee.

Force feeding renewable energy at great cost to tax payers and consumers is weakening our economy with the burden falling disproportionately on low and fixed income Vermonters. We should, instead, continue to rely upon proven low cost energy sources until renewable energy technology can make solar and wind generated power competitive with other sources.

The Bayley Hazen military road, a brain child of Gen. George Washington, runs through our remote Northeast Kingdom town on the way to Canada. Charlie and Deb Bucknam, the doyen and doyenne of the clan, and their daughters and sons in law Jen and Andy Black, and Serena and Paul Varley, are authors. We have a forward looking conservative perspective which we hope you enjoy.

About Us

The Bayley Hazen military road, a brain child of Gen. George Washington, runs through our remote Northeast Kingdom town on the way to Canada. Charlie and Deb Bucknam, the doyen and doyenne of the clan, and their daughters and sons in law Jen and Andy Black, and Serena and Paul Varley, are authors. We have a forward looking conservative perspective which we hope you enjoy.